Schaeffer's Trading Floor Blog

New Annual Lows: Alcatel Lucent, New Oriental Education & Technology, and Zynga

ALU, EDU, and ZNGA dropped to new annual lows today

by 7/17/2012 1:28 PM
Stocks quoted in this article:

The bulls are back on top this afternoon, brushing off the earlier skepticism that followed Federal Reserve Chairman Ben Bernanke's testimony to the Senate Banking Committee. At last check, stocks at new annual highs are outweighing the number of stocks at new lows. The NYSE has seen 39 securities touch annual lows, while the Nasdaq tallies 56 fresh lows. Among the equities sliding to new lows are Alcatel Lucent SA (ADR) (NYSE:ALU - 1.12), New Oriental Education & Technology Group Inc. (ADR) (NYSE:EDU - 15.65), and Zynga Inc (NASDAQ:ZNGA - 4.49).

  • ALU sank to an all-time low of $1.11 today after warning that it will miss its previous targets for full-year results. Technically speaking, the shares have lopped off 78% during the past year, and have underperformed the broader S&P 500 Index (SPX) by nearly 25 percentage points throughout the past three months. The stock could suffer a further blow, should any of the bullish analysts have a change of heart. Currently, there are four "buy" or better endorsements, four middling "holds," and three "sell" or worse suggestions.

  • Earlier today, EDU plummeted more than 30% to the $14.85 mark -- its lowest price since June 2009 -- as its fiscal fourth-quarter earnings missed expectations. Also, the Chinese company lowered its current-quarter revenue forecast and said it received an order of investigation from the U.S. Securities and Exchange Commission. This bout of weakness has exacerbated EDU's 49.3% year-over-year decline. What's more, the brokerage group appears to be oblivious to the stock's technical and fundamental predicament, as eight out of the 11 analysts maintain a "strong buy."

  • ZNGA dropped to an all-time worst of $4.45 this morning. The Wall Street rookie has notched a year-to-date loss of more than 52%, and has lagged the broader SPX by 46.7 percentage points during the past 60 sessions. Despite this trend, the call/put volume ratio of buy-to-open activity at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) measures 4.61 over the last 20 days, with speculators scooping up calls at a much faster pace than their put counterparts.

Click here to read the new highs list, including The Walt Disney Company's (NYSE:DIS) analyst-induced all-time best.


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